Bank of England Carney: Rates Low Until Recovery is Secured

Mark Carney, the governor of the Bank of England, has used his first major speech to press home his determination to keep interest rates at their record lows until the “fledgling” economic recovery is secured.

Speaking to business leaders in Nottingham, Carney left the door ajar to a fresh round of quantitative easing (QE) if financial market turmoil threatens to choke off growth. “The Bank of England’s task now is to secure the fledgling recovery, to allow it to develop into a period of sustained and robust growth,” he said.

Carney also announced a £90bn loosening of liquidity requirements on banks, in a bid to free up lending to businesses and consumers.

Noting that the UK has endured its weakest recovery on record, Carney said: “The real cost of this poor performance is that around a million more people are unemployed than before the recession.

“Capacity has lain idle in firms and opportunities have gone wanting for lack of finance and confidence. It will take a period of robust growth to begin to reduce meaningfully this spare capacity in the labour market and in companies.”

via The Guardian

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